Finance minister says less than 700,000 barrels are available to allocate freely as calls grow for production subsidies to local refineries…..
The Federal Government says Nigeria currently lacks sufficient crude oil to meet the requirements of the Dangote Refinery and other domestic refineries without relying on imports.
Minister of Finance Taiwo Oyedele made this known on Friday during a televised interview, while responding to calls for a production subsidy to help the Dangote Refinery meet local demand for refined petroleum products.
Oyedele dismissed suggestions that the government could simply offer crude oil at discounted production costs, arguing that Nigeria does not have enough freely available crude to meet the refinery’s needs.
“So the people that are saying, ‘We’ll discount it, we’ll do the cost of production,’ don’t know what they’re talking about. We don’t have enough to service Dangote. Dangote imports crude. And I just want us to establish that fact,” he said.
The minister explained that although Nigeria currently produces about 1.8 million barrels of crude oil daily, the entire volume does not belong to the country because of existing production-sharing contracts and joint ventures with oil companies.
“Under the production sharing contract and joint venture, they share these things. And the ratios vary. Let’s say roughly 45, 55, right? You do that,” he said.
He added that deductions for production costs and royalties further reduce the quantity available to the government before the remaining profit oil is shared.
“Then there’s the cost. To produce it, to get it out of the ground, you take it in the cost of oil. That’s also barrels that are going away. Then you take the one for royalty. Before you now start talking about profit oil that you share. The long and short of what I’m telling you is that whatever is left for Nigeria, we have sustained it almost entirely because of fuel subsidy.”
Asked how much crude oil remained available after these deductions, Oyedele said the country could not freely allocate enough to meet the needs of domestic refiners.
“I don’t want to go into the technicalities, but the reality is that today we do not have up to 700,000 free crude to give anyone, including Dangote,” he said.
The minister said the Federal Government’s naira-for-crude initiative, introduced by President Bola Tinubu, had helped stabilise the domestic market but remained constrained by limited crude availability.
“That’s why when Mr President introduced the Naira for Crude, it was meant to help us gain some stability. And it has worked, but we don’t have enough quantity to give as of yet,” he added.
According to Oyedele, increased domestic production would eventually enable Nigeria to supply the Dangote Refinery and other local refiners with sufficient crude oil.
“As we ramp up production and we free up some barrels, we’ll get to a point where we’ll be able to give Dangote everything he wants and other refiners will be able to get enough. I even hope personally that we get to a point in Nigeria where all the crude we produce will be refined in Nigeria and we only export refined products,” he said.
The remarks come amid renewed calls for government intervention to ease rising petrol prices, with opposition figures proposing different measures, including production subsidies for local refineries.
On Thursday, Oyedele disclosed that the Federal Government had introduced a 30-day discount on petrol sold by the Nigerian National Petroleum Company Limited (NNPCL).
The announcement drew criticism from opposition politicians and members of the public, who argued that the measure amounted to a return of fuel subsidy through another route.
Tinubu introduced major economic reforms after assuming office in 2023, including the removal of the petrol subsidy and the floating of the naira.
Although economists have broadly supported the reforms, they have contributed to higher living costs and increased financial pressure on households across the country.
For many Nigerians, subsidised petrol had helped keep transportation, food and other essential goods affordable, despite longstanding concerns over poor public services and corruption.
Tinubu has maintained that removing the subsidy was necessary to prevent a deeper economic crisis as the cost of sustaining the programme became increasingly difficult for the government to bear.
Nigeria, Africa’s largest oil producer, is also home to the continent’s biggest refinery, owned by billionaire businessman Aliko Dangote.
However, petrol prices have climbed to about ₦1,400 per litre from roughly ₦830 before the conflict in the Middle East, with the government largely allowing market forces to determine prices rather than introducing broad measures to contain the increases.
